SNP Expects Further Increase in Revenue and Earnings in 2024 after Record Year with Strong Software Growth

• Group revenue in 2023 increased by 17% to € 203.4 million (2022: € 173.0 million)
• Over-proportional growth in high-margin software business segment
• EBIT rose by € 4.3 million to € 11.1 million (2022: € 6.8 million), currency-adjusted increase would be around € 11 million compared to 2022
• Order entry with partners rose by 51% to € 98.0 million (YoY growth 2022: 13%)
• Positive operating cash flow of € 12.5 million (2022: € -0.5 million)
• 2024 outlook: Increase in revenue forecast to between € 215 and 225 million, with an EBIT of € 13 to 16 million and a book-to-bill ratio greater than one.
  
  

Jens Amail, CEO of SNP, comments:

“Thanks to the outstanding work of our team and the continued trust of our customers and partners, 2023 was a good year for all of us. All key measures – particularly on the go-to-market and people side – contributed to our success and are building a strong foundation for the future. Now, after our best year ever and with a stable corporate governance model in place, we will drive operational excellence to the next level and elevate our strategy. In a highly dynamic business environment with increasingly complex IT landscapes in the Cloud, the core capabilities of SNP are more relevant than ever. We’re pleased with what we have achieved in 2023, but I‘m convinced that the best is yet to come – for our customers, our partners and our incredible team.”

Strong growth in SNP’s Software business segment …

Revenue in the service business segment increased by 14% to € 134.2 million (2022: € 117.3 million). Software revenue rose by 23% to € 69.3 million (2022: € 56.1 million). This positive trend was shaped, above all, by the strong order situation in relation to SAP S/4HANA and RISE with SAP. At € 145.1 million, order entry volumes in this business segment amounted to around 55% of the overall order entry volume. The software solutions of SNP’s CrystalBridge® platform are enjoying growing levels of market and customer acceptance, also thanks to a stronger ecosystem.

… and in its partner business

SNP further expanded its global partnerships and now has contractual agreements in place with 17 of the 20 largest IT consulting firms. This progress has resulted in significantly stronger growth in the order entry volume with partners than in the previous year: In 2023, this climbed by 51% to € 98.0 million; in the previous year, business with partners grew by 13% to € 65.1 million. Revenue with partners increased by 18% to € 63.8 million (2022: € 54.2 million).

Significant increase in order entry

The overall order entry volume totaled € 266.1 million, 37% higher than the figure for the previous year (2022: € 193.6 million). The service business segment accounted for € 188.4 million and the software business segment for € 77.7 million. The order backlog is 37% higher year-over-year and amounts to € 180.4 million (2022: € 131.8 million).

Operating cash flow improved significantly to € 12.5 million due to SNP’s strong operating performance and its improved cash management processes (2022: € -0.5 million).

Equity ratio increases by 1.0 percentage points to 41.5%

SNP also remains very well positioned in terms of capital. Equity increased by € 1.4 million compared with the end of the previous year to € 108.6 million. With a slightly lower volume of total assets, the equity ratio improved to 41.5% (2022: 40.5%). Due to the reclassification of noncurrent liabilities to current liabilities, noncurrent liabilities decreased by € 9.6 million while current liabilities rose by € 5.0 million.

2024 outlook

Assuming that the economic sector environment remains positive, SNP predicts a positive business development in the 2024 fiscal year. Revenue is expected to rise to between € 215 million and € 225 million (previous forecast provided in the 2023 half-year financial report: € 210 million to € 220 million; 2023 revenue: € 203.4 million). At the same time, SNP is forecasting its expected operating earnings (EBIT) in a range of between € 13 million and € 16 million (EBIT 2023: € 11.1 million). For its order entry, SNP continues to expect a book-to-bill ratio (order entry over sales revenue) greater than one.

The Annual Report 2023 is available on our website at https://investor-relations.snpgroup.com/en/publications/